12/05/2006

The richest 2% of adults in the world own more than half of all household wealth, according to a new study by a United Nations research institute.

The report, from the World Institute of Development Economics Research at the UN University, says that the poorer half of the world's population own barely 1% of global wealth.

There have of course been many studies of worldwide inequality.

But what is new about this report, the authors say, is its coverage.

It deals with all countries in the world - either actual data or estimates based on statistical analysis - and it deals with wealth, where most previous research has looked at income.

What they mean by wealth in this study is what people own, less what they owe - their debts. The assets include land, buildings, animals and financial assets.

Why does it matter? Because wealth serves as insurance against times when income tends to fall, such as unemployment, sickness or old age.

It is also a source of finance for small businesses, a particularly important point since it is the countries with lower levels of personal wealth which also tend to have weaker financial systems without the funds, ability or inclination to lend to small firms.